GRAND RAPIDS, MI – The owner of a real estate title agency is facing federal allegations that he conspired to obtain multiple mortgages on properties without the lenders’ knowledge.

Scott D. Hoeft, the owner of Prime Title Services, LLC, is accused of conspiracy to commit wire fraud in a felony information filed Thursday, Nov. 1, in U.S. District Court in Grand Rapids.

The filing of felony information, rather than presenting the case to a grand jury, signals that a plea deal is in the works.

The alleged crimes occurred between 2002 and 2006.

Hoeft’s company conducted residential and commercial real estate closings and issued title insurance policies as an agent for other companies.

The government said he and others, who were not named, took part in a “mortgage stacking scheme to fraudulently and unjustly enrich the co-conspirators at the expense of victim lenders and title companies that insured the properties.”

Under such schemes, the buyer or owner of real estate obtains several mortgages. Lenders are kept unaware of previous mortgages or liens, or told that loan money will be used to pay off an existing loan. The lenders are also told they have priority over other loans if the owner defaults.

Such loans are actually subordinate to prior loans, and come with an added risk of default with the owner obligated to pay multiple payments, Assistant U.S. Attorney Brian Delaney wrote in court documents.

“When the mortgage defaults, which it invariably does, the lender attempts to foreclose on its mortgage, only to find that it is of no avail because of a previous mortgage(s) has first priority,” Delaney wrote in the felony information.

He said Hoeft and a buyer, identified only by the initials CPG, convinced lenders to provide loans they would not have approved if they had been provided with truthful information, Delaney said.